This year's imbalance of electricity and gas, exacerbated by increasing restrictions, has become one of the main factors reducing production and decreasing the actual profitability of energy-intensive listed industries. Gas restrictions began earlier than in previous years, and the electricity restrictions for industries were not completely resolved in September. The steel, petrochemical, and cement industries are the most affected by the energy imbalance.
Challenges of Energy Imbalance
The energy imbalance in Iran is not a new phenomenon and has become one of the challenges of the economy in recent years. Power outages due to production shortages and load management have shown an upward trend in recent years, and in the gas sector, the winter deficit has become a serious challenge for meeting demand. This year, the restrictions not only started earlier but, contrary to expectations, the electricity restrictions for industries were also not completely resolved in September, making the production planning environment for industry managers more difficult than ever over two consecutive seasons.
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Damage to Industries
This year's electricity imbalance has reached a level that includes a significant portion of the nominal electricity production capacity. In the gas sector, damage to infrastructure and the transmission network has brought the annual imbalance gap to an unprecedented level, severely reducing production. Gas restrictions started at the beginning of this year, and factories have continuously been using mazut.
Energy-intensive listed industries can be divided into several main categories: the steel industry, which simultaneously relies on gas for sponge iron reduction and on electricity for electric arc furnaces, has been severely affected. In the steel market, traders' behavior has been influenced by fears of electricity restrictions, and the demand-to-supply ratio has significantly increased.
In the petrochemical industry, methanol and urea companies, which have suffered the most damage, are facing production declines due to damage to utility units during the war. Additionally, in the cement industry, factories are forced to use mazut due to gas restrictions, which significantly increases production costs.
In response to this crisis, the government has put programs in place. Executive officials have emphasized that electricity and gas supplies to industries should not be cut off, and a plan to restore damaged gas supplies is underway before the onset of the cold season.
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